New EU Rules to Improve Gender Balance in Corporate Boards Enter into Application
Brussels, January 3, 2025 – Today, the new EU Directive on Gender Balance in Corporate Boards (2022/2482/EU) enters into force, aiming to accelerate progress towards gender equality in the leadership of listed companies in the European Union.
Background
The new Directive builds on the 2012 EU Recommendation on Gender Balance on Corporate Boards, which encouraged Member States to set targets for gender representation on boards. However, progress has been slow, with women making up only around 34% of board members in EU-listed companies as of 2023.
Key Provisions
The Directive sets out the following key provisions:
- Binding targets: Member States must ensure that, by June 30, 2026, the underrepresented gender (typically women) constitutes at least 40% of non-executive board members in publicly listed companies.
- Flexible implementation: Member States have the option to implement the targets through legislation, codes of conduct, or other measures.
- Penalties for non-compliance: Member States must establish effective and proportionate sanctions for companies that fail to meet the targets.
- Reporting and monitoring: Companies must publicly disclose their gender balance data on boards and explain any measures taken to improve representation.
Benefits
The new Directive is expected to bring significant benefits, including:
- Increased gender diversity: More women in leadership positions will bring a wider range of perspectives and experiences to decision-making.
- Improved economic performance: Studies have shown that companies with diverse boards have better financial outcomes.
- Increased trust and legitimacy: Boards that reflect the diversity of society are seen as more credible and trustworthy.
- Inspiration for future generations: Young women and girls will be inspired by seeing more female role models in leadership.
Implementation and Enforcement
Member States have two years to transpose the Directive into national law. The European Commission will monitor the implementation and enforcement of the Directive, and will report on progress in 2028.
Reactions
The Directive has been welcomed by women’s rights organizations and business leaders. However, some stakeholders have expressed concerns about the potential for quotas to restrict the selection of the most qualified candidates.
Conclusion
The new EU Directive on Gender Balance in Corporate Boards is a significant step towards achieving gender equality in the leadership of European companies. By setting binding targets and providing flexibility in implementation, the Directive aims to accelerate progress and reap the benefits of a more inclusive and diverse corporate governance landscape.
New EU rules to improve Gender Balance in corporate boards enter into application
The AI has provided us with the news.
I’ve asked Google Gemini the following question, and here’s its response.
EU a new article on 2025-01-03 14:50 titled “New EU rules to improve Gender Balance in corporate boards enter into application”. Please write a detailed article on this news item, including any relevant information. Answers should be in English.
84